Treasury

Simplification Update

Baroness Vere of Norbiton: My honourable friend the Financial Secretary to the Treasury (Nigel Huddleston) has today made the following Written Ministerial Statement.The government wants the tax system to be simple, fair and to support growth, and has issued a clear mandate to officials in HM Treasury and HMRC to put tax simplification at the heart of policy making.At Autumn Statement 2023, the government published its four main objectives on tax simplification:Tax rules should have a clear consistent rationale and be easy to understand.The burden of compliance and administration should be proportionate for taxpayers and HMRC and it should be easy for taxpayers to get their tax right.Taxpayers should be able to understand their obligations and options particularly at key lifecycle points, such as when they do something for the first time or infrequently.Tax policy should not unnecessarily distort the decisions of taxpayers and result in poorly informed choices.It also announced a comprehensive set of changes to make it easier for businesses and individuals to interact with the tax system reducing the time and money spent on tax administration, allowing them to focus on their businesses and daily lives.Today, the government is setting out further measures to simplify the experience of taxpayers, using the efficiencies of digital services to drive public sector productivity.Enhancing the Non-Reimbursed Expenses ServiceEach year, HMRC receives 1.1m claims for tax relief from employees on their expenses. These claims are submitted through existing online services, or via digital or paper forms, resulting in some claims being manually processed. To simplify the process for many employees claiming tax relief on their expenses, and for HMRC to automatically process claims, the government is designing a new, online service for employees to claim tax relief on all of their expenses in one place, meaning employees will get relief sooner. HMRC will provide further details later this year.Mandating the Payrolling of Benefits in KindThe government will mandate the reporting and paying of Income Tax and Class 1A National Insurance Contributions (NICs) on benefits in kind via payroll software from April 2026, building on the progress already made on the government’s ambition to fully digitalise the reporting of benefits in kind. Mandation will simplify the tax affairs of 3 million people and reduce the need for them to contact HMRC.This measure will reduce administrative burdens for thousands of employers and HMRC by simplifying and digitising the process of reporting and paying tax on all employment benefits. It will remove the need for 4 million end of year returns to be submitted to HMRC. HMRC will engage with stakeholders to discuss our proposals to inform design and delivery decisions and draft legislation will be published later in the year as part of the usual tax legislation process. HMRC will also work with industry experts to produce guidance, which will be made available in advance of 2026. Further information will be published via usual communication routes, such as through employer bulletins.Amending the Parents’ NI Credit (Child Benefit)As announced in April 2023, the government will legislate to introduce a route for people to apply for National Insurance Credits for Parents and Carers for tax years where they have not claimed Child Benefit, to ensure that people do not miss out on their State Pension entitlement. The credit will add qualifying years of National Insurance where eligible which will support future State Pension eligibility. Individuals will be able to claim this Credit from April 2026. The eligibility for the Credit will be closely based on Child Benefit eligibility criteria. Transitional arrangements will ensure those affected since 2013 are still able to claim. Going forward, applications will be available for six years following the relevant tax year. The government will bring forward secondary legislation as soon as possible.Today, the government is also exploring further opportunities to make the tax system simpler and fairer.Tax Simplification for Alternative FinanceThe government is today publishing a consultation proposing changes to the Capital Gains Tax (CGT) rules that apply to alternative finance arrangements. The proposed changes seek to amend those rules so that where property is used as collateral for the purposes of raising finance, the CGT outcome is the same whether alternative finance or conventional finance is used. The consultation also asks whether there are any implications for capital allowances. The consultation will be open to responses for 12 weeks, closing on 9 April 2024.Reform of the UK Law in Relation to Transfer Pricing, Permanent Establishment and Diverted Profits Tax The government is today publishing a summary of responses from a consultation undertaken last summer, which proposed reforms to transfer pricing, permanent establishment and Diverted Profits Tax legislation. The aim is to develop simpler, shorter legislation that is easier to understand and to administer and provides greater certainty for both HMRC and taxpayers. The government will continue to engage with stakeholders on the proposed approach set out in the summary of responses with a view to publishing draft legislation for consultation later in 2024.

Foreign, Commonwealth and Development Office

UK Delegation to the Parliamentary Assembly of the Council of Europe

Lord Ahmad of Wimbledon: My Honourable Friend, the Parliamentary Under Secretary of State for Europe (Leo Docherty MP), has today made the following statement:The Rt Hon Member for Alyn and Deeside (Mark Tami MP) has been appointed as a substitute member of the United Kingdom Delegation to the Parliamentary Assembly of the Council of Europe.

Review of Wilton Park

Lord Ahmad of Wimbledon: My Honourable Friend, the Parliamentary Under Secretary of State for Americas, Caribbean and the Overseas Territories (David Rutley MP), has today made the following statement:I am announcing today the conclusion of the review of Wilton Park, an Executive Agency of the Foreign, Commonwealth and Development Office (FCDO).As I noted in my statement in June on the commencement of the Review, The Public Bodies Review programme delivers against the commitments made in the Declaration on Government Reform to increase both the effectiveness of Public Bodies and departmental sponsorship, making Government work better in service of the public. This review of Wilton Park follows the Tailored Review of Wilton Park in 2018.Wilton Park is a key strategic asset in the FCDO’s portfolio. The review found that Wilton Park continues to make valued contributions as a convenor and facilitator of international policy discussions, and noted Wilton Park’s most important feature is its ability to convene and facilitate extended, in-person conversations among diverse groups of policymakers at mid-senior level to support international policy objectives.This Review comes at an important time for Wilton Park, which has successfully steered through the challenges of the Covid-19 period and is considering options for its future.We are very grateful to the Lead Reviewer, Lorraine Wilkinson, and her team, for their hard work on behalf of Wilton Park and the Government. Their recommendations will give vital structure to further sharpen the strategic alignment of Wilton Park with the objectives of His Majesty’s Government, while safeguarding its independence and ensuring Wilton Park continues to provide value for money for the taxpayer.The Lead Reviewer’s overview and the review recommendations, along with the Government’s statement of how it intends to take these recommendations forward has been published on gov.uk.A copy of the review and the Government's response will be placed in the libraries of both Houses.

Department for Levelling Up, Housing and Communities

Implementation of New Overseas Electors Franchise

Baroness Penn: My Honourable friend the Minister for Local Government (Simon Hoare MP) has made the following Written Ministerial Statement:On 27 May, 2021, the former Minister for the Constitution and Devolution, the Honourable Member for Norwich North, updated the House on the Government’s plans to bring forward measures in the Elections Bill (now Act) to remove the arbitrary 15-year limit on the voting rights of British citizens living overseas.The Government committed in its 2019 manifesto to enable more British citizens, living overseas and with a demonstrable connection to the UK, to vote in UK Parliamentary elections – and to enable them to do so more easily. We have delivered on that promise.Votes for Life, DeliveredI am pleased to be able to inform the House that, as of today, the 15-year limit on overseas electors’ voting rights is abolished. British citizens living abroad, who have been previously registered or previously resident in the United Kingdom can apply to register to vote in UK Parliamentary elections.British expatriates continue to have strong links with the United Kingdom. Decisions on foreign policy, Brexit and trade will directly affect their lives. Now we have left the EU, it is more important than ever to strengthen our ties with the British expatriate community. We want all British citizens abroad to remain part of our democracy, and they should continue to have their say in UK Parliamentary elections.Improving Accessibility, Enhancing SecurityThe registration period for overseas electors has been extended from one year to up to three, making it easier for an elector to maintain their registration for longer.The majority of electors can now also apply for an absent vote – postal or proxy – online. This will be particularly useful to British citizens living overseas, as it will speed up the process for obtaining an absent vote.In Great Britain, overseas electors’ absent vote arrangements will – from now – also be tied to the registration renewal process, meaning that an overseas elector will be able to renew their registration, and their absent vote arrangement, at the same time. This makes it easier for an elector to maintain their registration for longer, with an absent vote arrangement in place ahead of elections. This means that, when a UK Parliamentary election is called, the elector’s absent vote can be issued without delay.As now, the integrity of the registration process will be maintained, with all overseas applicants subject to identity checks when applying to register to vote, or when applying for an absent vote. In the first instance, this will be matched against government-held data, with documentary evidence provided as a new step – in alignment with domestic registration. All applicants will also have their connection to a qualifying address verified by Electoral Registration Officers.In addition, postal vote arrangements will be restricted to a maximum of three years. For proxy arrangements, a fresh signature will be required for identity verification purposes every three years. This is all part of the concerted effort by government to improve the integrity of our elections.A More Inclusive and Representative DemocracyTogether, these changes will help to ensure that more British citizens resident overseas are able to participate in elections, and maintain a secure and robust electoral system.

Department for Business and Trade

UK Export Finance support for Ukraine

Lord Offord of Garvel: My Hon Friend the Minister of State for Business and Trade (Nusrat Ghani MP) has today made the following statement.Nearly two years since Russia brutally invaded the sovereign territory of Ukraine, the UK continues to stand resolutely with the Ukrainian people against Russian aggression.The UK is providing significant economic, humanitarian and defensive assistance to Ukraine, including through export credits and insurance from UK Export Finance (UKEF). As part of the UK’s support for the repair and defence of Ukraine’s critical infrastructure, UKEF has already agreed to provide financing for the reconstruction of 6 Bridges in Kyiv, support for Urenco’s contract to supply fuel to Ukraine’s largest power producer, Energoatom, and provided payment risk insurance for UK exporters trading with Ukraine.Government Ministers have decided it remains in the national interest for UKEF to stay on cover for Ukraine. This means that UKEF’s £3.5bn of financial capacity for UK exporters and their buyers in Ukraine is still available.The heightened risk of supporting Ukraine during a war falls outside of UKEF’s minimum risk standards as set by HMT and is not a typical activity undertaken by UKEF. Therefore, Ministers must instruct UKEF to operate.Depending on the volume and value of the transactions supported by UKEF, the Government could incur up to £3.5bn of contingent liabilities over time. UKEF will assess transactions on a case by case basis in accordance with normal policy and practice, whilst also obtaining written consent from Ministers and HMT before providing support for each transaction.

Ministry of Justice

Tribunal Capacity Update

Lord Bellamy: My right honourable Friend the Lord Chancellor and Secretary of State for Justice has made the following statement:'The Illegal Migration Act, once commenced, will provide for accelerated claims and appeal timescales for individuals subject to the Duty to Remove provisions of the Act when making suspensive claims relating to the narrow grounds of serious harm and removals conditions. The Act provides that these appeals are to be heard in the Upper Tribunal (Immigration and Asylum Chamber) rather than the First-tier Tribunal.The Act sets out that, once issued with a third country removal notice, individuals will have 8 days to make a claim to the Secretary of State for the Home Department. Having received a claim, the Secretary of State will have 4 days to consider the claim and decide whether it should succeed, and if not, whether to certify it as clearly unfounded.Where a claim is certified as unfounded, there is no automatic right of appeal. The individual can be removed unless they apply to the Upper Tribunal for permission to appeal within 7 working days from being given notice of the certification. These applications will normally be dealt with on the papers, noting that this is a judicial decision. The Upper Tribunal must decide whether to allow the appeal to proceed and notify the parties within 7 working days from when the application is made (there is no right of appeal against the Tribunal’s decision). The Upper Tribunal may not extend either of these timeframes, unless it is satisfied that it is the only way to secure that justice is done in a particular case.Where the Secretary of State for the Home Department rejects the initial claim but does not certify it as clearly unfounded, or where the Upper Tribunal gives permission to appeal, the individual has 7 working days from when they are notified of the Secretary of State’s decision, or from when they are given permission to appeal, to give notice of appeal to the Upper Tribunal. The Upper Tribunal must make their decision and give notice of that decision to the parties within 23 working days from the day the appeal was lodged. Again, the Upper Tribunal may extend either of these timeframes only if it is satisfied that it is the only way to secure that justice is done in a particular case.The Ministry of Justice has been working to increase capacity in the justice system in preparation for the commencement of the Act. Additional hearing rooms have been prepared, making a total of 25 hearing rooms available within the existing Immigration and Asylum Chamber (IAC) estate in London. These rooms are set up with remote hearing technology, allowing for either in-person or remote hearings to maximise flexibility. Over 100 additional staff have been recruited to support the Upper Tribunal’s work and are currently undertaking training ready for the commencement of the Illegal Migration Act.The Illegal Migration Act provides for First-tier Tribunal judges to be deployed to sit in the Upper Tribunal to hear Illegal Migration Act appeals. The judiciary have identified relevant judges, which could provide over 5,000 additional sitting days. The decision on whether to deploy additional judges temporarily to the Upper Tribunal, including when they sit and the courtrooms they use, is for the independent judiciary and will be taken by the relevant leadership judges at the time and in the interests of justice. In addition, the Lord Chancellor has asked the Judicial Appointments Commission to recruit more judges to the First-tier and Upper Tribunal. The recruitment will conclude in the next few months and new judges will be appointed, trained, and start sitting from this summer. We are confident that, with the additional court room and judicial capacity detailed above, in line with projected levels agreed with the Home Office the vast majority of Illegal Migration Act appeal work will be dealt with by the courts in an expedited manner.'

Call for Evidence on the Personal Injury Discount Rate

Lord Bellamy: I announce today the publication of Setting the Personal Injury Discount Rate: A Call for Evidence. This call for evidence is intended to obtain evidence to inform the second review of the Personal Injury Discount Rate (PIDR) under the Civil Liability Act 2018. The call will remain open for twelve weeks. The PIDR is important in ensuring that claimants who suffer serious, life-changing personal injuries receive full damages, including for their future financial needs. It is the percentage figure used to help calculate how much a compensator (usually an insurer or body such as the NHS) pays to a claimant, in the form of a lump sum. It is assumed that claimants will invest this lump sum and accrue a return on that investment and the PIDR represents what the real rate of return on this investment is expected to be.The Civil Liability Act 2018 introduced changes to the way the PIDR is reviewed and set, and this is the second review under that methodology. It is also the first where the Lord Chancellor will consult with the Expert Panel he has appointed as well as His Majesty’s Treasury.The responses to this call for evidence will inform the work of the Expert Panel and the Lord Chancellors considerations in reviewing the PIDR later this year. The Lord Chancellor will formally consult the Expert Panel in due course and inform both Houses, in line with the timetables set out in Part 2 of the Civil Liability Act 2018.Copies of the call for evidence can be found here: https://www.gov.uk/government/calls-for-evidence/setting-the-personal-injury-discount-rate.